Investing in Stocks

BACK TO BASICS: Equity investors own a part of a listed company. In return for your cash, you gain voting rights to have a say in the way it is run, and a share of its profits

Emma Wall 5 September, 2017 | 9:31AM

 

In exchange for cash, an investor can buy a proportion of a company – called a stock or share. If the company does well the share price will go up, and the shareholder can crystallise this gain by selling the share. If the company does badly the share price will fall; this is the risk of being a shareholder and having what is known as equity investments.

Companies with spare cash will often choose to reward loyal shareholders with a pay-out known as a dividend. Large cash-generative companies pay a regular dividend either once, twice or four times a year. If one company buys another, or sells off some assets it may pay a one-off special dividend.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Apple Inc318.11 USD0.44
Ocado Group PLC2,037.00 GBX-3.32

About Author

Emma Wall  is former Senior International Editor for Morningstar

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